Margin pressure: Ireland Blyth’s half-year operating profit inches up 1%
The marginal rise in operating profits from Rs 618.3 million to Rs 622.6 million confirmed the continued pressure on margins for the company involved in seafood, commerce, financial services and logistics. (Image: Company)
Mauritius-based logistics and retail major Ireland Blyth Limited (IBL) saw revenue up 5% to Rs 10.3 billion but could only notch a marginal 2.85% rise in profit after tax to Rs 389.5 million for the half year ended December 2013.
Also, for the quarter ended December 31, 2013, IBL generated revenues of Rs 5.1 billion against Rs 4.7 billion for the corresponding period of 2012 while the 3-month period actually saw a decline in net profits to Rs 171.7 million against Rs 186 million in the corresponding period of 2012.
The management noted that the 5% growth in revenue over last year yielded an increase of less than 1% in profit from operations confirming the continued pressure on margins for the company involved in seafood, commerce, financial services and logistics.
The engineering and retail sectors were particularly affected whilst new lines of business in certain other sectors helped to mitigate the impact.
IBL’s financial statement shows that the operational profit for the quarter from October to December actually declined from Rs 306.6 million to Rs 284.4 million while 6-month profits to 31 December rose, albeit marginally, from Rs 618.3 million to Rs 622.6 million.
However, associated companies posted better results, thus improving the profit before taxation from Rs 416 million to Rs 435.1 million for the corresponding period of 2012.
Seafood operations in the last six months witnessed impaired profitability due to deteriorating market conditions. However, this has been compensated by the good performance of the marine activities.
The revenue contribution of the ‘Seafood and Marine’ sector went down to Rs 2.97 billion for the half-year ended 31 December compared to Rs 3.00 billion in the corresponding period in 2012 while profits declined from Rs 268 million to Rs 267 million.
Besides, the engineering sector showed marginal rise in turnover at around Rs 1.74 billion (2012: Rs 1.71 billion) accompanied by a steep drop in profit contribution from Rs 137.6 million to Rs 88.6 million.
The retail sector displayed a turnover of Rs 2.74 billion, representing a marginal rise of 3.8% over revenue recorded for the corresponding half-year of 2012 but profits disappointed at Rs 43.7 million, against Rs 50.9 million a year ago.
The ‘Logistics, Aviation and Shipping’ sector performed well with turnover contribution of Rs 395.3 million, against Rs 374.45 million last year, while profits also shot up to Rs 82.7 million against Rs 62.3 million a year ago.
Finally, the financial services sector increased its contribution to Rs 856.42 million against a segmental turnover of Rs 715.61 million in 2012 while profits rose to Rs 73.3 million against Rs 62.6 million in the year-ago period.
IBL management anticipated that trading conditions will continue to be a challenge for the rest of the year.